Five Travel Startups In India That Are Disrupting The Industry

Regardless of whether you have the budget for it, everyone loves traveling. People like to plan for a retreat from their hectic lives, and just want to throw their hands back and relax, even if it’s just for the weekend. They need a getaway, but several factors stop them from getting one – be it immense workloads, conflicting engagements,  or just having shoestring budgets. This is a problem that’s been concerning the western world for quite some time, and only recently has the travel bug found its way into India.

Nevertheless, some people didn’t stop at just wishing for something to happen. They tested the waters, got their feet wet, and launched products that compete with the whole world today. Travel startups are a commonplace today, but there are only a handful of these in India that have stood the test of time, and continued to serve customers all over the globe. In this article, we’re going to look at these companies, and the success stories behind them.

But before we get started, we need to answer a few critical questions relating to the industry, so you can get a better idea as to how big the travel industry really is, what its future prospects look like, and how these companies really fare against the current trends.

Is the travel industry growing?

The tourism sector of India brought in 275.5 billion USD in revenues in FY18. It accounted for 9% of the employment in the country. That number, however, has slumped to a loss of 1.68 billion USD in FY20. Just in case it isn’t obvious, the reason is the COVID-19 pandemic. 
One of the biggest concerns with the travel industry in India today is the COVID-19 onslaught. Revenues have been cut-off by nearly 65% and this is discouraging a lot of businesses from trying to grow in the space. Not everything’s rain clouds and typhoons, though. With relaxations on many sectors being planned in the coming months, we could well see a spike in the tourism sector of the country.

Travel Industry after Covid-19

Like we mentioned earlier, the growth of the tourism sector in India has slumped, but it doesn’t mean it’s going to stay there forever. People are betting on travel startups and veteran companies to take charge and literally lead the industry towards greener pastures. Plus, if you think you’re the only one in dire need of a vacation from the monstrous work from home hours, you’re not alone.

The government of Karnataka is seeing a steady increase in the number of inquiries for open resorts and bookings. And we’re predicting a lot of states are going to be receiving calls soon. With relaxations easing out in most states, people are starting to come out, and eventually, they will yearn for a solid vacation. Travel startups are preparing for this turn. We should be seeing some exciting offers popping up on our screens in the coming months.

In case you’re wondering if this might be the right time to start a company in the travel sector, you might want to hold-off on that thought. The list of travel startups in India is brain-numbingly long, and the competition cut-throat. There are only a handful of companies that are doing brilliantly well, and we’ve got a brief overview of them ahead to help you understand the scope of the market, and whether or not starting one would be a good idea. Let’s take a look.

Travel Startups in India

MakeMyTrip

Everyone knows about MakeMyTrip. The company has established itself as one of the biggest travel companies  in India. MakeMyTrip is an online travel company that offers a plethora of recommendations to people looking for a nice holiday.

The company was established in 2000, and it’s safe to say it’s one of the few companies that have stayed in the business for over two decades. Founded by Deep Karla, it is headquartered in Gurugram, and employs over 3000 people. The firm has now gone on to even eat up its competition, acquiring Ibibo Group being the biggest head turner of them all. 

Besides recommending holiday destinations, MMT also recommends holiday packages, exclusive offers on hotel bookings, and even transportation. In short, MakeMyTrip is your all-in-one place for everything travel related.

OYO Rooms

OYO has become synonymous with people looking to book hotel rooms for their vacations and getaways. It is easily one of the most recognizable businesses in the country, and has great deals on hotel rooms all year round.

Started in 2013 by a 21-year-old Ritesh Agarwal, OYO grew rapidly, making headlines as it began partnering up with hotels back-to-back across cities, and now is even operating overseas. There are currently over  17,000 employees under OYO, operating in a little over 8000 establishments in India and South Asia. Needless to say, Ritesh Agarwal became a phenomenon after launching OYO, and for a while was the youngest billionaire in India

At $9 billion USD, OYO is still a popular tool all these years later, simply because we don’t think there are companies that are doing a better job at providing hotels at an outstanding rate. Currently, the company is working to boost the travel sector in the country, joining forces with AirBNB, EaseMyTrip, and Yatra.

Ithaka

Ithaka is the new kid on the block competing against the more mature startups like MMT and OYO.  After making a few pivots, Ithaka is now helping people plan their vacations the right way. It gets influencers and travel experts to volunteer and help people plan their trips better.

Started in 2015 by Rahul Singh and Mithilesh Said, Ithaka has made quite a few changes in its business model, and is still raising capital to expand heavily and market itself. But its current business model is refined and is getting results.

In 2020, Ithaka had helped around 30,000 travellers make better trips and travel with better preparations made. Hopefully, it’s going to continue becoming more than just a chat-based app and will boost the travel sector further ahead.

ScoutMyTrip

ScoutMyTrip is another intelligent travel startup that focuses on a very specific niche – road trips. The application helps travellers plan their road trips by using its data to suggest places to eat, stay, and have a good shower. Travellers know how good of a deal that sounds.

In 2016, road-trip fanatics Deepak Ananth and Vineet Rajan finally decided that more people need to get on the road and go see the world. The problem was that people didn’t know how the roads would treat them. If you’re someone who’s stayed in one place for too long, you know even travelling to another place for some time can be intimidating. The solution – ScoutMyTrip.

The website uses travel experts to plan out the whole trip for you, so you know exactly what’s in for you on the trip. You can of course customise the itineraries to create your own personalized trip, and even plan corporate and group trips. Road trips aren’t better with Spotify Premium, they’re better with ScoutMyTrip.

Tripoto

Tripoto is another trip planning startup that helps you prepare itineraries for your future trips. It’s kind of like an online wishlist of all the places you’d like to go to and make memories in. But it doesn’t just end there – Tripoto collects this data to recommend better locations and plan memorable trips based on the kind of itineraries you make.

The company was started in 2013 by Anirudh Gupta and Michael Pargal Lyngdoh. It collects stories from different users to recommend trips that suit your tastes. Based on these stories and experiences, you can make informed decisions on your travels.

The company is currently valued at $20 million USD after its recent fundraising of around $3.5 million USD.

How do travel companies make money?

How travel companies make money is not rocket science. They receive commissions on recommending places that people would be interested in traveling to. And this doesn’t just apply to hotels or restaurants – companies receive commissions on travel packages, connecting travellers with expert guides, and so on.

OYO is a great example of this – It makes you great offers on longer stays, because the hotels pay up commission to get more customers checking in. The longer they stay, the higher they pay. Even MakeMyTrip makes its money by selling package deals. Ithaka and ScoutMyTrip make money through their expert travel planners. The commissions the company receives for recommending tourist destinations and deals is split between the company and the travel experts.

In short, most travel startups in India generate revenue through commissions. It’s not the fanciest way to make money, but these companies make a lot of money from them, so we can’t really judge.

Closing Thoughts

Now that you know how travel startups work in India, it should help you make a clear decision on whether or not you should jump in and launch a product targeting the industry. It is a rough business to be in currently, but with relaxations in lockdowns in the country, and many others, we’re sure the sector is going to bounce back soon.

Apart from the startups mentioned in this list, we also have great players like PickYourTrail, goMowgli, and Nearify who are fighting to survive in the current market, but have some exciting ways of working. Although we’re not sure how many of these startups will survive the pandemic, the journey post the pandemic is going to be a really exciting fight to the top. And no matter who comes on top, we’re sure you’re going to have a great trip.

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Vani

Vani

In her free time Vani loves storytelling and helping talent meet their aspirations. She has been a part of enterprise, growth stage startups & VC firms. She is driven to make stories and startups matter.

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